Deliver IT Strategic Cost Optimization Through Smart Spending
CIOs need to establish strategic cost optimization within IT to maximize business value and minimize spending. This involves:
- Cutting/Reducing Spend: Eliminate waste or redundancy.
- Optimizing Performance: Improve efficiency and productivity.
- Creating Value: Align spending with critical business outcomes.
IT Strategic Cost Optimization Moves IT Spending from Reactive to Proactive
To maximize business impact, CIOs should engage in smart spending by continuously rationalizing spend, optimizing assets, and reinvesting in high-performing technologies.
Steps to Smart Spending:
- Establish Why Smart Spending Matters: Raise awareness about the importance of smart spending.
- Identify and Operationalize IT Spending Behaviors: Encourage new mindsets and behaviors for smart spending.
- Reinforce IT Smart Spending Behaviors: Recognize progress, address knowledge gaps, and set rituals to reinforce new behaviors.
Continuous Spend Reduction
CIOs should continuously review and cut spend that doesn’t impact business outcomes, rationalize all new spend against business priorities, and renegotiate with vendors.
Optimizing Spend
Shift resources towards higher-value IT initiatives. Identify functional or business areas with cost variances and apply differentiated spending approaches.
Fund New Capabilities
Invest in areas that deliver business value by aligning spending with priority business outcomes, planning and prioritizing initiatives, executing and measuring progress, and iterating and innovating based on stakeholder needs.
Source: Gartner